Total Debt @350% of GDP
Japan: Locus of the Next Crisis?
The past five year rally in global credit was driven by liquidity flows and carry trades. Zero percent interest rates subsidized highly leveraged lending to the riskiest of sovereign borrowers. As long as the liquidity flows continued, the underlying solvency was never put into question. When liquidity flows inevitably reverse due to risk aversion, pricing of debt/credit/bonds will be based solely upon ongoing solvency of the underlying borrower. At that point in time, the Minksy Moment will arrive seemingly out of nowhere.
History's Largest Circle Jerk
Third World wage slaves produce the goods. Over-leveraged Western consumers borrow from the wage slaves (via recurring trade deficits) to buy the goods, billionaires capture the arbitrage profits between rich and poor which they then lend to sovereign governments to service non-amortizing debts. Central Banks provide 0% liquidity to paper over the latent insolvency. All while policy-makers and the dunces at large pretend that this can go on indefinitely.
Borrowed Time and Money